The National Agricultural Cooperative Federation on Thursday elected Kang Ho-dong as the 25th NongHyup chairman, marking the first time in 17 years for the cooperative to have a directly elected chairman at its helm.

The federation, South Korea's biggest agricultural cooperative comprised of 2 million members, is expected to see a significant reshuffling of the federation's governance structure under the new leadership.

The former head of the Yulgok Nonghyup chapter in Hapcheon-gun, South Gyeongsang Province, beat his rival Cho Deok-hyun in a second round of runoff by winning 781 votes over Cho's 464 votes. In the first final vote, where seven candidates competed, Kang led the race with 48.8 percent but failed to win the majority.

After his victory was confirmed, Kang said he would devote his four-year term to "renewing NongHyup and returning the love and support from the people."

“Through changes and innovations, we will create a ‘farmer’s agricultural cooperative’ and make it global,” he said.

During his election campaign, Kang had promised to ramp up the interest-free funds to 20 trillion won ($14.98 billion) and bolster the federation's mutual finance capability to reduce the financial burdens of the local agricultural and livestock cooperatives.

He also pledged to improve the governance structure of the organization through the integration of NongHyup Agribusiness Group into NACF.

The NACF in 2012 established a financial holding company and an agricultural holding company to physically separate the operations of its subsidiaries. In order for the organization to restructure, it will need to go through the amendment of the Agricultural Cooperative Act and the resolution of its board of directors.

There are a total of 32 subsidiaries under NACF, including the flagship NH NongHyup Bank affiliated to the financial holding firm, NongHyup Financial Group.

The NACF chairman is considered the "president" of Korea's agricultural community, leading the nation's biggest farmers' federation of around 2 million members and assets worth 145 trillion won.

While the position is described as an honorary post, the chairman holds the authority to appoint the CEOs of the NACF affiliates and subsidiaries, thereby exercising a powerful influence in the country's agricultural and financial industries.

According to the federation, Kang is set to begin his four-year term in March, following the annual general shareholders' meeting next month.